Crypto Investment Products Experience $1.2 Billion Outflow in Two Weeks as Investors Identify ‘Weakness’ in Altcoins
Investors have withdrawn a total of $584 million from cryptocurrency investment products in the past week, bringing the total outflows over the past two weeks to approximately $1.2 billion. This shift in funds may be attributed to concerns over potential interest rate cuts by the Federal Reserve later this year, reflected in investors’ pessimism. CoinShares’ Digital Asset Fund Flows weekly report reveals that products focused on Bitcoin experienced outflows worth $630 million, while Ethereum-focused products saw outflows of $58.3 million. Additionally, products shorting Bitcoin faced outflows of $1.2 million, and Cardano-focused products experienced $300,000 of outflows.
Surprisingly, products that offer exposure to multiple cryptocurrencies saw inflows of $98 million within a single week. CoinShares suggests that investors view the weakness in the altcoin market as an opportunity to invest. Year-to-date inflows for these products stand at $136 million, with a significant portion of these funds entering the market in the past week.
These inflows occurred at a time when the total market capitalization of cryptocurrencies excluding Bitcoin, Ethereum, and stablecoins dropped from around $600 billion to $475 billion within a month, amidst a substantial market downturn that saw Bitcoin’s value fall to the $61,000 mark.
In terms of specific investments, products offering exposure to Solana ($SOL) attracted inflows of $2.7 million, while those focusing on Litecoin received $1.3 million of inflows. XRP-related products received $700,000 of inflows, and Chainlink ($LINK) products experienced $300,000 of inflows.
Interestingly, recent data indicates that long-term Bitcoin holders have started to sell the holdings they accumulated during the bear market in January, coinciding with the listing of spot Bitcoin exchange-traded funds (ETFs) in the United States. In contrast, long-term Ethereum holders continue to accumulate.
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